When Rockwall Mayor Bill Cecil motioned to approve next year's $22.6 million budget Monday night, it appeared to be the first step in a formality.

Instead, no one seconded the motion, leaving Rockwall on the brink of entering a new fiscal year Wednesday without a budget, something that could have meant massive service reductions.

With the council unexpectedly deadlocked 3-3, Mayor Bill Cecil adjourned until the following night, when member Mark Russo would be back in town.

"People didn't speak up and all of a sudden they're speaking up," said Mr. Russo, who said he had left town expecting the spending plan to sail through. "What in the world?"

On Tuesday, council members rejected two budgets before approving a compromise with a larger property tax rate increase than planned. The initial budget would have taken the tax rate from 48.65 cents per $100 valuation to 50.04 cents. The compromise sets the rate at 50.31 cents.

The owner of a $200,000 home will pay $1,006, up $33 from last year.

Council members Glen Farris, Margo Nielsen and Matt Scott had pushed Monday for increasing the rate to as much as 50.86 cents per $100 valuation.

There was no debate about the budget's contents. It adds seven firefighter positions for two stations under construction, a police officer and merit raises of 4 to 5 percent for city staffers.

But a rift emerged on how to fund day-to-day operations. Proponents of the initial budget said they were caught off guard Monday by complaints from Mr. Farris, Ms. Nielsen and Mr. Scott that the budget relied too much on reserves and accounting maneuvers.

"If we're going to add positions, we have to fund them appropriately," Mr. Scott said. "We can't keep using smoke and mirrors to avoid a half-cent tax increase."

Mr. Russo and council members Cliff Sevier and David Sweet have repeatedly opposed tax increases. They had been willing to support the initial 1.39-cent increase to pay for voter-approved projects – mostly roads. But they did not want to raise taxes to fund operations.

Mr. Scott said the initial budget would have put the city in a deeper hole next year – requiring either a big tax increase or big cuts.

"That's a little bit of the scare tactics," Mr. Sweet said.

Ms. Nielsen credited Mr. Sweet for spending Tuesday at City Hall working on a compromise, which the council passed 6-1 that night with only Mr. Farris opposing. It's similar to the initial budget but depends on about a quarter-cent tax hike to decrease the reliance on reserves and other funding pools.

"We already agreed what we were doing," Mr. Sweet said. "We were just figuring out what bucket to put it in."

The tax increase, voted on separately from the budget, passed unanimously.

Mr. Russo had campaigned against any tax hikes but said he voted for the increase, reluctantly, to avoid a stalemate.

"It's easy to say no new taxes at all," he said. "I'm still unhappy, but I felt like I did the best I could."

Rockwall's property tax rate has grown from 36 cents to 50.31 cents in four years, largely to pay for voter-approved road construction.

Finance Director Mary Smith said the city could still face another tax hike next year unless sales tax revenue and property appraisals grow unexpectedly.